ShangGong Group: Chinese Challenger Acquires German Premium Brands
(9 pages of text)
In 2013, ShangGong Group — a Chinese sewing machine manufacturer — had successfully acquired three German manufacturing companies that were more technologically advanced than it was. The aim of these acquisitions was to help ShangGong catch up to other multinational players in the international market. While the CEO had learned a few lessons from the first acquisition, the strategic and operational challenges were different this time. He needed to act decisively while dealing with the companies’ many stakeholders in Europe and China. One of his goals was to strengthen ShangGong’s market position in China using both its German and domestic brands. Beyond the recent acquisitions in Germany, how could he solidify ShangGong’s leadership in China and eventually challenge the Japanese companies who were leading the global market?
If used at an early stage of strategy or international business courses, the case can be used to discuss key strategy issues related to foreign entry and international mergers and acquisitions. After successful completion of this case, students should be able to:
- Assess the motives and design strategies used in foreign entries and international mergers and acquisitions.
- Assess the challenges and design strategies for post-entry and post-acquisition management in overseas operations.
- Explain how acquiring a foreign company can strengthen a firm’s position in its home country.
- Propose solutions for post-acquisition challenges related to cultural and professional differences amongst employees and management personnel.
China, Germany, Large, 2013
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